In an effort to achieve optimal efficiency, entities seek to continuously reduce inventory, while still maintaining enough inventory to satisfy demand at any given time. Supply chain management is utilized to minimize costs and maximize performance with timely and efficient meeting of all demands.
Many current supply chain management systems employ reorder point systems or similar forecast-based scheduling systems that batch demand, resulting in demand distortion in the supply chain. Other “pull” or “just in time” systems lack coordination among supply chain activities and lack focus on maintaining appropriate days-of-supply of inventory. Thus, a system that triggers each supply chain activity to manufacture, order, or ship products that are in shortest supply, thereby avoiding stock outages while maintaining minimum inventory levels would be desirable.